"I'm kinky, everyone else is a pervert"
FA is a fetish porn site. And no, I don't mean the "furry fetish" thing. FA categorizes it's submissions by fetish, ferchrissakes. I really think that once you decide you're going to allow fetishes, you really have no business making taste judgements beyond "that's illegal". Furries have a real glass-house problem when it comes to being the arbiter of what is a quality sexual fetish. Now whether or not that leads to some less desirable types finding a home here is another issue, but you get the idea.
I think FAF is reacting the way they are because they are a bunch of socially-inept dorks with sexual issues. The only people who can be arsed to care about this sort of stuff on any serious level are people who are acting out of insecurity. This is a "loophole" only in the sense that it wasn't specifically banned. But where is the line? There is no line. You literally have to think of everything. Either that or you need some administrators with broad powers of discretion and excellent judgement.
Is it gross? Yes. It's disgusting. Now what? Make a comment about how everything is a fetish on the Internet, rule 34 hurr hurr, and move on. Of course, that assumes you have something else to do other than hang out on FAF.